PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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CORPORATE GOVERNANCE AND INTERNAL CONTROL REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE

Compensation Committee 2.1.7.4

Composition

On 28 August 2018, the Compensation Committee comprises: Chairwoman: Ms Nicole Bouton (Independent Director) Members: Mr Ian Gallienne (Independent Director) Mr Pierre Pringuet (Director) Ms Kory Sorenson (Independent Director) Mr Stéphane Emery (Director representing the employees)

Three out of the four Directors who are members of the Compensation Committee (excluding the Director representing the employees (1) ) are Independent Directors (75%), it being noted that the AFEP-MEDEF Code recommends an independence rate of 50%. In FY18, the Compensation Committee met five times, with an attendance rate of 91.7%. The roles of this Committee, as confirmed by the Board of Directors on 12 February 2014, are the following: reviewing and proposing to the Board of Directors the compensation to be paid to the Executive Directors, ● provisions relating to their retirement schemes and any other benefits granted to them; proposing rules to this effect and reviewing these on an annual basis to determine the variable portion of the ● compensation of the Executive Directors and ensure that the criteria applied are in line with the Company’s short, medium and long-term strategic orientations; recommending to the Board of Directors the total amount of Directors’ fees to be submitted for approval to the ● Shareholders’ Meeting, as well as how they should be distributed: for duties performed as Board members, ● for duties carried out on Committees of the Board of Directors; ● being informed of the compensation policy of the Senior Non-Executive Managers of the Group companies; ● ensuring that the compensation policy for Senior Non-Executive Managers is consistent with the policy for ● Executive Directors; proposing the general policy for allocation of stock options and performance-based shares, in particular the terms ● applicable to the Company’s Executive Directors; approving the information provided to the shareholders on the compensation of the Executive Directors (in ● particular, the compensation policy and the components of the compensation submitted to the approval of the shareholders under the “Say on Pay” resolutions) and the policy for the allocation of stock options and performance-based shares. Further details of the work of the Compensation Committee are provided in the "2.1.8 Compensation policy " ● subpart. During FY18, the members of the Compensation Committee considered the drafting of the Executive Director’s ● compensation policy in light of the recommendations of the AFEP-MEDEF Code and the “Sapin 2” Law, subject to the Shareholders’ approval on 9 November 2017 (“ ex ante vote”). The members of the Compensation Committee also worked on the governance rules (AFEP-MEDEF, AMF) and the market practices regarding the Executive Directors’ compensation in order notably to propose an increase in the annual fixed compensation of the Chairman & CEO. They also reviewed the attendance fees of the Directors.

Main roles

Main activities in FY18

Outlook for FY19 In FY19, the Committee will continue with the tasks it is carrying out for the Board of Directors, notably the review of the options and performance-based shares allocation policy in view of the renewal of the related resolutions at the Shareholders’ Meeting to be held in November 2019. In accordance with the AFEP-MEDEF Code, Directors representing the employees are not taken into account when determining the percentage of (1) independent Directors on the Board of Directors or its Committees.

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018